Donald Trump Announces Tariffs on Mexico and Canada, Causing Financial Markets to Plummet | US News
The 25% tariffs imposed by Donald Trump on imports from Mexico and Canada are now in effect.
In a speech at the White House, the US president announced the tariffs, leading to a significant drop in US stocks.
US companies, particularly those with manufacturing operations in Canada and Mexico, such as automakers, are expected to be heavily impacted.
Mr. Trump stated: “They’ll be facing tariffs. Their best option is to establish their car plants and other operations in the United States, thus avoiding tariffs.”
He added that there is “no room left” for negotiations that would see the tariffs lifted in exchange for reducing fentanyl trafficking into the US from neighboring countries.
As of 12:01 am Eastern Standard Time (5:01 am GMT), Mexico and Canada have been subjected to 25% tariffs, including a 10% tariff on Canadian energy, as confirmed by the Trump administration.
Moreover, tariffs on imports from China will increase from 10% to 20%.
In response, Canada announced immediate retaliation, instituting 25% tariffs on US imports valued at C$30 billion (£16.3 billion). They further indicated that these tariffs would be expanded in 21 days to include additional US goods if the US did not revoke its sanctions against Canada.
China also pledged to retaliate, asserting that the Trump administration is attempting to “shift the blame” and “intimidate” Beijing regarding fentanyl issues.
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What is America’s trade position?
Mr. Trump’s statements have raised concerns about a trade war in North America, causing volatility in financial markets.
Indices such as the Dow Jones Industrial Average and Nasdaq Composite experienced declines of 1.4% and 1.76%, respectively.
Vehicle manufacturers, including General Motors, which has a large truck production facility in Mexico, along with Ford, saw their share prices drop significantly.
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Experts predict that US consumers may encounter price increases in the coming days.
Gustavo Flores-Macias, a public policy professor at Cornell University, New York, indicated that “the automobile sector is particularly likely to experience significant adverse effects”.
This is attributed to intertwined supply chains across the three nations during the manufacturing process and the anticipated rise in vehicle prices, which may suppress demand,” he explained.
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The Trump administration is preparing to introduce more tariffs in the forthcoming weeks.
On April 2, reciprocal tariffs will be enacted against all countries that impose duties on US goods.
The administration is also contemplating imposing 25% tariffs on goods from the EU “very soon”, asserting that the EU was established to “take advantage of the United States”.
